Gevo (GEVO) Reports In-Line Q3 Loss of 9c/Share

November 14, 2016 4:00 PM EST
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Gevo (NASDAQ: GEVO) reported Q3 EPS of ($0.09), in-line with the analyst estimate of ($0.09). Revenue for the quarter came in at $6.9 million versus the consensus estimate of $9.12 million.

Outlook for 2016

As previously disclosed, Gevo restarted production of isobutanol at its production facility in Luverne, MN, (the “Luverne Plant”) in March 2016. All operations, including the distillation system, are now up and running. During the third quarter, Gevo produced approximately 145,000 gallons of isobutanol. During 2016, Gevo has produced a total of approximately 240,000 gallons of isobutanol.

In terms of its previously issued 2016 guidance, Gevo expects to:

  • Produce approximately 500,000 gallons of isobutanol at the Luverne Plant for the year ending December 31, 2016, near the low-end of the previously announced range of 500,000-650,000 gallons.
  • Decrease the variable cost of producing isobutanol at the Luverne Plant to a range of $3.00-$3.50/gallon (assumes corn price of $3.65 per bushel and nets the value of the isobutanol distiller's grains (the "iDGs™"), enabling isobutanol to be produced at a positive contribution margin, based on an expected average selling price for isobutanol of between $3.50-$4.50/gallon.
  • Increase sales of isobutanol into core markets such as the renewable ATJ fuel, marina, off-road, isooctane and solvents markets.
  • Achieve an average quarterly corporate-wide EBITDA burn rate (excluding stock-based compensation) of $3.5-$4.5 million. Corporate-wide EBITDA burn rate is calculated by adding back depreciation and non-cash stock compensation to GAAP Loss From Operations.

Through the balance of 2016 and into 2017, we will continue to be focused on optimization work to improve the Luverne Plant at its current scale, but more importantly with a view towards significantly expanding the Luverne Plant. We plan to optimize the overall production processes with the intent of improving robustness and consistency of production, increasing production volumes, and potentially producing specific grades of isobutanol tailored for specific applications. This optimization work could result in us needing to add more equipment (tanks, controls, pumps, distillation columns, etc.), systems or processes in the future at the Luverne Plant.

Despite the production ramp-up delays described above, we expect that by the end of 2016 to have the capability to be at a production run rate equivalent to 1.5 million gallons per year at the Luverne Plant. Although we expect to have this production capability, we currently expect to run at a rate less than 1.5 million gallons per year as we scale up and test new process improvements to further reduce costs and optimize production in general at the Luverne Plant with a view towards significantly expanding production capacity in the future.

For earnings history and earnings-related data on Gevo (GEVO) click here.



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